A weather eye on strategy

Alison Watkins
knows all to well how fickle farming is. The persistent rains that have farmers along the eastern seaboard on tenterhooks as they hope for a dry spell long enough to harvest one of the biggest crops on record has already played havoc with the
GrainCorp
chief executive’s private farm in Victoria.

“We had to put the cattle on the canola so that was a bit sad," Watkins says. “We got a lot of rain as have a lot of farmers so I have some real empathy."

It’s little wonder that when Watkins took centre stage to deliver her first profit result at the helm of eastern Australia’s monopoly grains handler on Thursday, she adopted a cautionary tone.

But her warning that GrainCorp’s malt business would generate lower earnings in 2011 and that the grain’s handler would also lose income this year from the delayed harvest caught the market off guard and sent GrainCorp shares into a tailspin.

The share price closed down 15¢ to $6.84 on Friday extending the rout since Thursday to 12 per cent and closing at its lowest level since August.

Some analysts and shareholders were privately seething after having taken a bullish view on GrainCorp, poised to benefit from a possible record east coast harvest.

Those that have worked alongside Watkins say the former Woolworths board member and Australia and New Zealand Banking Group director is no sugar-coater.

“She’s very sensible," a senior executive says. “But she’s not a salesperson so I think she will be cautious by nature."

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GrainCorp director
Donald McGauchie
says one of the attributes he most likes about Watkins is that she’s a realist. “She’s not unduly cautious or too full of optimism."

Watkins, a mother of four who grew up on her parents’ farm in Tasmania, has had a baptism of fire since agreeing in June to fill the void left by
Mark Irwin
, who suddenly left GrainCorp three months after the much-hyped $757 million acquisition of United Malt Holdings.

Watkins is one of a few women to lead a top-100 public company, joining the ranks of Westpac Banking Corp chief
Gail Kelly
, Harvey Norman’s
Katie Page
and MAp Airports’ boss
Kerrie Mather
.

As the head of a male-dominated organisation,Watkins appreciates the difficulties in increasing the number of women in senior management ranks and on boards.

But it is an issue she believes corporate Australia must be proactive about. Watkins plans to play a leading role, with GrainCorp soon to outline its plans to boost female participation in its ranks that will include appointing a female non-executive director to the all-male board.

The plan pre-empts a requirement by the Australian Securities Exchange that will require all listed companies to set diversity targets and disclose the number of women in the company and in senior executive and board ranks next year.

“The pipeline effect won’t produce any great change in the time frames that we would like to see," Watkins says. “I certainly believe that being proactive and setting objectives makes sense."

But a heavy-handed approach could be detrimental, Watkins says. “I don’t believe in quotas as such. In fact it would be a very bad thing if we ended up with legislated quotas because you really do need to take a pretty thoughtful approach to this, which is industry and company specific."

Recruited by agribusiness entrepreneur
Doug Shears
to lead Berri Juice, Watkins delivered double-digit earnings growth after reinvigorating the business and capturing the juice-to-go craze.

She’s now confronted by a different task – reinvigorating the one-time state government-owned infrastructure business so it can better compete against major international trading players that have flourished since the wheat market was deregulated in 2008.

Watkins has been nutting out her strategy aimed at growing GrainCorp across the “grain chain", which she will detail to investors in February.

It will mark six months since she took the helm and, on her very first day in the job, stunned the market with an $856 million takeover for AWB that was later gazumped by Canada’s Agrium.

Watkins remains confident she made the right decision not to raise GrainCorp’s offer. The collapsed deal meant Watkins was able to more quickly reshuffle her senior management team after working intently on strategy and synergies in her embryonic weeks.

The failed deal left some to describe GrainCorp as vulnerable to a takeover by cashed-up international players intent on stepping up their presence in Australia.

“We are not feeling like a sitting duck at all," Watkins says. “We are feeling very much in control of our own destiny and that is the way we would like it to remain.